Volume: 37

Number: 16

OSCE ECONOMIC FORUM FOCUSES ONINVESTMENT AND SMALL BUSINESS DEVELOPMENT

By Marlene KaufmannCSCE Counsel

The twelfth meeting of the Economic Forum of the Organization for Security and Cooperation in Europe convened in Prague, The Czech Republic, May 31 – June 4, 2004.

The United States Delegation, ably led by U.S. Ambassador to the OSCE Stephan M. Minikes, included public members Rebecca Rannich, President and CEO of MedRespond; Stuart Gilman, President of the Ethics Resource Center; and Michael Rattie, Senior Program Manager, The Institute for Entrepreneurial Excellence of the University of Pittsburgh; as well as State Department Officers Katherine Brucker and Susan Archer, and myself on behalf of the Commission.

Under the broad theme “New Challenges for Building up Institutional and Human Capacity for Economic Development and Cooperation,” the Forum participants representing 50 of the OSCE participating States focused their discussion and recommendations primarily on three subjects: supporting the development of small and medium-sized enterprises; stimulating foreign and domestic investment; and human capacity building – improving the professional skills needed for developing a market economy through education, dialogue and public-private partnerships. Three preparatory seminars held throughout the OSCE region in the run up to the Prague meeting had developed these topics and corresponding working groups were convened at the Forum.

One plenary session reviewed the implementation of OSCE commitments in the economic and environmental dimension. A special session was held on partnership with the business community, and the closing plenary addressed the Integration Processes in the OSCE. During the week, special side events were held on Promoting Entrepreneurship and Opportunities for Economic Development for Roma and Sinti; Public-Private Cooperation in the Prevention of Trafficking in Human Beings; and Promoting Cooperation with the Mediterranean Partners for Cooperation.

In his statement to the opening plenary, Ambassador Minikes challenged the delegations to focus on practical ways the participating States and the OSCE can improve business development and the investment climate. He asserted that the theme of the Forum was perhaps a bit ambitious in that talking about “building up capacity” assumes that one is building on solid ground. The problem facing many transition states, according to Minikes, is “that the ground is not solid; too often governments are not willing partners in creating conditions conducive to business development. To the contrary, I have found during my intensive travels that too often governments are expert, not in promoting, but in blocking business.”

In the face of intransigence on the part of government officials at the top, Ambassador Minikes suggested working from the bottom up to change public attitudes so that there is zero tolerance for corruption – by reaching out to young people by expanding the OSCE’s Youth Entrepreneurship Seminars and Civic Education Youth Camps, by ensuring free, fair and transparent elections, and by supporting free and open media. “History has shown us that if governments create the opportunity for business to do business, free of the oppressive weight of corruption and over-regulation, business will identify the opportunities and it will flourish. What we need to do is clear the road of the roadblocks, of unnecessary, lengthy detours, and of illegal toll booths collecting criminal fees that go into the pockets of the few, but that represent an illegal tax on us all,” Minikes said.

Members of the U.S. Delegation participated fully in all aspects of the Forum by chairing working groups, actively engaging in discussions regarding small business development, foreign investment and promoting transparency in both the public and private sectors, and by networking with business representatives and government officials from the participating States.

Not surprisingly, corruption emerged as the major impediment to increasing both foreign and direct investment and promoting business and institutional development. The OSCE Strategy Document on the Economic and Environmental Dimension, approved at the OSCE Ministerial Council in Maastricht in December 2003, calls on the participating States to adopt a comprehensive and long-term anti-corruption strategy. As a result of the efforts of Commission Co-Chairman Senator Ben Nighthorse Campbell and Ranking Democratic Member Representative Benjamin L. Cardin, the OSCE Parliamentary Assembly has called for the convening of a meeting of OSCE Ministers of Justice and Interior to initiate such a long-term strategy.

In all, more than 60 specific recommendations – ranging from improving economic and investment laws, regulatory reform, establishing codes of ethics and promoting investigative journalism to promoting internship and exchange programs, encouraging the development of independent business associations and chambers of commerce, and working with individual communities to create local strategies for sustainable development – emerged from the working groups and the plenary sessions in Prague.

Some proposals, such as expanding the OSCE’s Youth Entrepreneurship Seminars and related programs and enhancing the economic work of the OSCE field missions, particularly regarding business development, can be undertaken by OSCE institutions. Ultimately, responsibility for implementing these recommendations, and those contained in the OSCE’s Maastricht Economic Strategy document, rests with the participating States themselves. It remains to be seen how earnestly and effectively governments will undertake the necessary legislative, institutional and regulatory reforms, thus creating the “level playing field,” where businesses – big and small, foreign and domestic – can flourish.

The United States Helsinki Commission, an independent federal agency, by law monitors and encourages progress in implementing provisions of the Helsinki Accords. The Commission, created in 1976, is composed of nine Senators, nine Representatives and one official each from the Departments of State, Defense and Commerce.